Keeping up With Financial Predators

While interviewing Shawna Reeves Nourzaie for another recent posting, I asked her what affect the sub-prime crash has had on her job. Shawna is a social worker at the Fair Lending Project for Seniors of the Council on Aging Silicon Valley. She organizes community education and outreach events about predatory lending and hooks victims up to social and legal services. Up until now, her passion has been on steering folks away from risky loans. Here's what she had to say:

Our educational focus has needed to shift radically. Teaching seniors to avoid risky loan products that no longer exist on the market doesn’t make a whole lot of sense. Our main focus now is identifying seniors who have already been victimized and helping them bring legal claims against predatory lenders and brokers. We also provide them with social work services and help them locate reasonable fixed rate loan products that will allow them to stay in their homes—not an easy task!

We're also providing much more education to seniors about reverse mortgages in light of all the marketing that is targeting them these days. My hunch is that when the credit crunch hit and lenders pulled their riskier sub-prime products, many mortgage brokers shifted their focus to the senior market and reverse mortgages. For some seniors, especially those in ill-health who might need nursing homes soon, the reverse mortgage is a terrible choice because of the high upfront costs and because the loans come due when the homeowners are out of their homes for 12 months.

For other seniors though, including victims of predatory lending who now have monthly loan payments that they cannot afford, the reverse mortgage can be the lifesaver that allows them to stay in the home. They have become the only loan product available to many seniors on fixed incomes. The risker products they were qualifying for just two months ago to get cash out are no longer available, leaving the reverse mortgage as the last product standing.

Keeping up with the various and sundry schemes that profiteers and predators use to exploit the elderly isn't easy. Just when you think you understand one, it's passé.

By the way, if you haven't seen Off the Hook Again: Understanding Why the Elderly Are Victimized by Economic Fraud Crimes, released last year, I recommend you do. Produced by the Consumer Fraud Research Group for WISE Senior Services and the National Association of Securities Dealers (which has since changed its name to the Financial Industry Regulatory Authority, or FINRA), the report describes the findings of a study aimed at understanding 1) what kinds of persuasion tactics cons use in investment and lottery scams and 2) How victims differ from non-victims. The researchers' hope is that identifying specific psychological persuasion tactics is the first step in alerting potential victims. They're also hoping that their work will lead to the development of instruments to measure vulnerability to various frauds.

What they found is that perps tailor their pitches to meet the "psychological needs" of potential senior victims. Perpetrators of investment fraud, for example, may befriend their victims, scare or intimidate them, or vary their techniques. As for who's vulnerable, in the case of investment fraud victims, the results were surprising. Victims were found to be more financially literate than non-victims, which goes against the conventional wisdom that it's naiveté or lack of experience that renders elders vulnerable to financial abuse. Victims were also:

More likely to listen to sales pitches;

More likely to rely on their own experience and knowledge when making investment decisions;

More likely to experience difficulties from negative life events than non-victims; and

More optimistic about the future.

For the full report, click on Off the Hook Again

Archstone Foundation Creates Community of Contractors

Last month I was at the second “convening” of Archstone Foundation grantees, representatives from projects funded under the foundation’s 5-year, $8 million Elder Abuse and Neglect Initiative.

I’m not actually a grantee but consult on two training projects. Along with my colleague Eileen Goldman, I’m helping faculty at San Francisco's City College develop a curriculum for fire fighters, paramedics and emergency medical technicians, which will eventually be integrated into the school’s curriculum and made available on-line. The other is an advanced training curriculum on self-neglect for APS workers being developed by San Diego State. Training is one of three priority areas for Archstone; other grantees are targeting dental students (UCLA) and clergy (Santa Clara County).

Another priority is innovative projects, with the largest grant going to the University of California, Irvine for a Center of Excellence on elder abuse, an expansion of the University’s elder abuse forensics center, which has been around since 2003. The center, the first in the country to focus on elder abuse, does evidentiary investigations and interviews, runs two multidisciplinary teams; and provides education, technical assistance and consultation. They also do research and just completed a study on bruises that provides baseline data on “natural” bruising that can serve as the basis for evaluating the non-natural kind. Hopefully, it will help prosecutors and others respond to the ubiquitous “she fell” or “she’s on Coumadin” defenses. Another study is looking at the rates of pressure ulcers in nursing homes, which will be used to help identify substandard care, and a third study is looking at California’s APS data collection system (which, not surprisingly, is not getting rave reviews). Study results are available on the Center’s website at.www.centeronelderabuse.org.

The forensic center model is being replicated at the University of Southern California under another grant, and my former employer, the Consortium for Elder Abuse Prevention at the San Francisco Institute on Aging has a grant for what Consortium Director Mary Twomey has characterized as the “poor man’s forensics center.” It provides free geriatric assessments that focus on capacity and undue influence to community agencies and has organized a network of experts to provide on-line and telephone consultation. The center may lack the panache of the south California forensics centers, but fills a critical community need and a viable alternative to other communities.

Another large grant was awarded to add an elder abuse component to San Diego’s Family Justice Center in collaboration with the San Diego District Attorney’s Office. I first learned about the SD justice center last year in Waterloo, Ontario, where I sat in on at a meeting to discuss plans for adding an elder abuse component to their family justice center. Casey Gwinn, director of the SD center, had just been in town and caused quite a stir. Unlike the SD center, which operates out of a downtown high-rise, the Waterloo center is in a home-like setting. Still, the concept is the same: co-locating police, prosecutors, forensic experts, and victim advocates from public and private, non-profit agencies to provide “one-stop shopping” and “wraparound” services. Casey is also a pivotal player in a national project (US Office on Violence Against Women) to replicate the justice center model, an initiative he recently described on Oprah.

Other projects focus on the sticky issues of predatory lending (Council on Aging Silicon Valley) and investment fraud (WISE Senior Services of Santa Monica). The predatory lending issue has been particularly close to my heart ever since the Leadership Group of the San Francisco Consortium’s WE ARE FAMILY African American outreach project discovered over a decade ago that African American elders in SF were being targeted by predatory lenders working in cahoots with home repair companies to get them to take out loans to fix up homes damaged during the ‘89 earthquake. The tactics used to take homes and get them back have become much more sophisticated since then, and the Silicon Valley project is impressive. Project personnel are trying to figure out how to get to vulnerable seniors as early as possible.

California’s Administrative Offices of the Courts is doing a statewide survey of court practices in elder abuse. They’re focusing on a few courts, which include Alameda County’s Elder Court, which has gotten a lot of press lately. The court, under the guidance of Judge Julie Conger, has a case manager, a separate docket for elders, and has been using California’s elder abuse restraining order extensively. The orders, which differ from domestic violence orders (which are also used in elder abuse cases)can also offer protection against financial abuse and abuse by non-family members, and are one of several practices the AOC is looking at. The idea for the elder abuse order came from San Francisco’s MDT and was sheparded through the State Assembly by Consortium member Judy Hitchcock of Legal Assistance to the Elderly.

Several other grants were awarded to start specialized MDTs. The Area Agency on Aging Serving Napa and Solano Counties, and the Elder Financial Protection Network of Novato started financial abuse specialist teams (FASTs) and the Riverside County Regional Medical Center is developing an assessment team to focus on self-neglect. Other teams have been started by San Bernardino’s Arrowhead Regional Medical Center and the City of Long Beach.

I’ve been to dozens of contractors’ meetings and professional forums over the years, but what impresses me about the Archstone project is the tone. There’s a strong emphasis on creating a “community of contractors.” The group meets once a month by phone and has convenings twice a year for updates and to solicit feedback. Other unique features are a technical assistance component, provided by the Center on Excellence, which draws from its stable of in-house staff and community consultants, and the involvement of a research/evaluation firm. Also noteworthy is that the Archstone team includes experts. The foundation has been sponsoring innovative elder abuse prevention projects since the early 1990s, and Mary Ellen Kullman, the foundation’s vice president, has been active on the national scene, sponsoring and participating in events from the beginning. Laura Giles, the lead contract officer for the initiative previously worked for the Irvine forensics center. So far, the contractors have been pretty candid, a refreshing change from your standard dog-and-pony shows.

The high level of creativity, expertise, and experience; the continuity; both the diversity and the commonality of the projects; and the presence of practice-focused researchers and foundation reps around the table provide a rare opportunity. The group recognizes that and has started looking for new ways to harness its potential. Ideas that have been floated include building a network that includes non-professionals, community awareness campaigns and state-level advocacy. Personally, I’m hoping the project stays focused on the how-tos of serving victims. In this era of “evidence-based practice,” the new buzzword for designing programs based on tried and tested techniques, that, in itself, would be a tremendous contribution.